September 14, 2009
the butcher cover
9/14/09
Today I'm handing over the reins to one of the smartest folks I know: the effervescent and effortlessly au courant Ehren Gresehover. After hearing him articulate a major frustration I've had with digital music, I asked him to wax analog. With less ado:
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No doubt Ian and I would've become friends even if we'd tried not to. I'm a proud Tarheel, a staunch lefty, based in Brooklyn and Facebook friends with his mom. But I'd like to think that even had I been a Dookie, our twin obsessions with A) pop music and B) throwing a toddler tantrum whenever somebody tried to shove a piece of conventional wisdom down our throats would've found us ranting over a dram of single malt anyway.
And what he's asked me to talk about today is probably exactly the sort of thing we might have been talking about over good scotch, namely my refusal to feel sorry for the current plight of the music industry. The music executives have so far been pretty successful at controlling the narrative of the abysmal state of their business. Sales of CDs and cassettes have seen double-digit declines in sales year after year for most of the last decade. Digital sales have increased, but are nowhere close to filling the gap.
And the villain, of course, is a legion of evil teenagers, using increasingly sophisticated pieces of software to rip, burn, mash, post, pirate and steal the valuable product put on store shelves by dedicated music industry professionals.
As a music writer and a social media consultant, I've spent a lot of time thinking about the music business. And while I've got my problems with copyright law in the 21st Century, let's keep it simple: The music industry would have you believe that every downloaded song -- even those pilfered in giga-chunks on the torrents or boosted en masse off of your ex-boyfriend's ipod -- is a missed sale, an idea I find preposterous. But undoubtedly people do get some things for free that they would otherwise have bought, so let's just take that as a given.
But as I contemplated both the purchase of a Wii (to play Beatles Rock Band, natch) and the DVD of recent genre mash-up masterpiece DOOMSDAY, it seemed to me that something else might be going on. The Ehren of 1998 spent zero dollars on his "home video library" and didn't have much use for video games. Not because I didn't like movies or video games, but just because I didn't really see the value in owning movies or playing the sort of video games that were available.
But these days, buying a movie on DVD is a much better experience, with lots of nifty bonus features, higher fidelity and no need for a separate rewinder shaped like a Corvette. And video games are approaching the sort of immersive real-life experience that Tron (the movie) promised but Tron (the video game) fell far short of delivering. Is it possible the reason people are buying less music because they're buying more movies and video games? It seemed like an interesting question.
A quick Googling of the relevant info gave me enough to paint an interesting picture. I decided to use data from two years:
1999: Napster's summer launch and the beginning of widespread fired sharing, the beginning of the DVD player as a must-have add-on for high-end home theater systems, and just before the video game console wars that saw Playstation 2, Nintendo's Game Cube and the XBox try to blast each other apart... and
2005-2006: when all of these things had all matured to more or less the point we're at now. I took the figures from a variety of sources, and while they're not rigorous enough for publishing in The Economist, I think they're good enough to show an interesting trend.
1999
music sales $14.2 Billion
dvd/vhs sales+rental $12.8 Billion (dvd sales only $0.8 billion of this total)
Console video games + units $9.6 Billion
2005/2006
music $10 Billion
dvd/vhs $24.3 Billion
console games + units $17.1 Billion
So while the music industry lost $4 Billion, or something like a third of its business in that time frame (and has lost more since), the total amount of money people spent on take-home entertainment has almost doubled, from $32.6 billion to $55.6 billion. Interesting, huh?
So there's no question that the music product has been devalued as a result of file-sharing. And I think the same thing will happen more and more with movies and video games as time goes on. But imagine - if you will - that the music, movie and video game industries are actually just three giant companies competing for the home entertainment market, in the same way that the big car companies compete for the personal transportation market.
When you look at it that way, "Music Inc." just looks like a dinosaur that can't keep up with two hungry innovators with fancy new products to sell, and a flagging demand for their own. Not unlike GM in the mid-80's, with gas prices and maintenance issues opening up the market for more nimble companies from Japan.
So I'll toss down my cash to relive Beatles' early gigs at the Cavern Club, and I'll probably buy 13TH WARRIOR on DVD to have swordfights to watch while I toss down a slice of pizza before going out, but until the music industry finds a way to sell me a higher-value product, I'll probably continue to download most of my music from the blogs -- for free.
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Ehren explains it while we've both been drinking, May '08
One thing you didn't mention that I think is a HUGE factir in the decline of the music industry: the consolidation of the major labels into fewer and fewer hands. The major labels stopped looking at music as art and began seeing it as a commodity. All their Harvard Business School MBAs assumed they could treat music like Velveeta and people would still fork over their disposable income.
I do think you're spot-on in saying that there's been a reshaping of the entertainment market -- the pie has grown, but music's share has diminished. There are still independent labels that are doing well, and a thriving international underground.
The real tragedy is what we lost when the Majors stopped caring about the music. In the 60s and 70s, Warner, Atlantic, Columbia, Reprise, Decca, Chyrsalis, etc invested in artists, and facilitated the development of artists. We may never again see the kind of artists that label system fostered: musicians who achieved both popular and artistic success.
Now that Beatles Rock Band is re-monetizing the most famous and well known music in history, it's a good idea to stop and think about a time when young guys with guitars and drums could unite the world and catalyze social change. Will we ever see that again? When I look around at the polarization in American society you can understand if I feel nostalgic for a time when it felt like everyone was on the same page.
Maybe I read too quickly, but did you guys address the decline of the "album" concept in popular music? I will buy entire digital albums from iTunes for certain artists (anything Jack White is involved in, for example), but most times I cherry-pick. Having come of age in the late 60s, early 70s when albums ruled the FM radio waves, I am troubled by this, but I have become very choosy about how I spend my music dollars. If I knew every album produced by a rock or blues band approached the seamless quality of, say, an Abbey Road or Rubber Soul, I would definitely go that way. But they don't. There is a lot of dreck and filler in most "albums" today, alas.
The current youth generation has no compunction about downloading (free) almost anything. I'm on a gossip chat board where almost all the participants are young women more than half my age, down into the late teens, and when we discuss an upcoming movie, they'll say, "Oh, I'll definitely be downloading that" -- meaning, as soon as it's released to theaters. The way they're so cavalier about illegal downloading takes my breath away sometimes.
Ehren, this was riveting. I've been dismayed for, actually, decades, about the music industry and its way of doing "business," and your take on the current, recent, and historical aspects is fascinating. Thanks for a great guest spot!
Yes, Kent, I completely agree that the industry began to realize that to some extent they could use enough marketing to fabricate a superstar, regardless of what the music sounded like. The problem with that, of course, is that the public eventually catches on to the idea that the music is essentially disposable. In part, kids don't buy music because they can get it for free, but even if it weren't, why buy something that is essentially worthless?
And this is definitely tied up in the AOR thing, Anne. I don't really listen to whole albums anymore because I listen to too much stuff, but I'm definitely conditioned to treat an album as a coherent artistic statement. And some still are. But labels have been suckering us into buying a $15 album for 3 good songs for a long time. Now that the consumer can actually just buy the songs they want, the labels are only getting $3 (if they're lucky) for that material, and the rest is just going unsold.
so, in the end what happens? do music stars and "record execs" make a normal salary, like $50k a year? kind of like doctors in venezuela make the same as waitresses?
i think it's a supply side issue. the internet has killed the need for a middleman between artist and audience, so there's no longer a bottleneck (big record companies) that limits supply of music. more supply = less scarcity = lower prices.
in addition to the marketing access provided by technology by way of the internet, technology also advanced recording gear such that the huge analog studio equipment required to produce quality recordings is now digital, available at a retail level price tag, and fits on a desk.
really the market doesn't work the same way as it did in the past because technology has democratized it and the monopolies are no longer the gatekeepers.
I know I shill this documentary all the time, but everyone should watch "The Corporation" - especially how it explains that corporations have the same rights as individual Americans ("corporate personhood") but if you view a corporation as a person, and you put it through the same psychological rigors, you would have to define it as a "psychopath".
I would add that music corporations - like the car companies Ehren mentioned - behave as clinical narcissists as well: they view all problems with their product as the fault of other products, the general environment, or technology. Without, of course, doing any honest analysis of their own inferior product.
It's amazingly self-destructive, but if you buy the psychopath theory...
It's no surprise to me that musicians have often led efforts to innovate the music business model. It was a working model for a small number of artists, but a lousy one for most. Move the conversation outside of the economic framework of music company profits, and things are pretty exciting: so much more opportunity to produce, distribute, listen, learn and share music. I'm not sure how, exactly, musicians can earn 100% of their living by making music going forward, but let's face it - very, very few have actually be doing that all along. If music companies weren't able to make precarious claims about artistic integrity and wield the power of copyright, no one would be wringing their hands, really. Businesses must find a way to innovate, or they die.
@Anne, I hear what you're saying about the downloading practices of young people, but I think it started well before them. I made cassette tape copies of my records (my parents did, too!) so that we could back them up and share them. I used to tape movies off of HBO instead of buying them on VHS, and I was a high-speed dubbing MACHINE in the eighties. (I think I supplied most of my junior high school with every early Cure album.) It's just that the methods of sharing music have gotten super efficient and our networks for sharing have grown vast. I feel like young people are pretty much the recipients of the relationship to technology and commodity that we've been fostering for thirty years - they just experience it about a gadzillion times faster and more intensely than we ever have.
well i think the net benefit of the new music business model goes to artists and against all music labels because the artists nowadays have more of a chance to own their own high quality future sound recordings by themselves and reap future benefit from whatever publicity they were able to suck out of the large corporate label touring, supporting an album owned by the label, etc. you can get established as a new artist and then go off your own with the fan base that was created through the label's pr efforts.
these days the money is in touring and licensing.